Middle-income population to reach 800 million by 2035 in China, researcher says
China’s domestic demand and openness will be accelerated by the country’s dual circulation strategy, experts said, adding that the strategy could propel the quest for common prosperity, while attracting more foreign investment to China.
At the 2021 International Finance Forum (IFF) annual meeting held on Saturday, Huang Qifan, chairman of the IFF academic committee, said that China’s dependence on foreign trade or exports would decline as the government focused on increasing domestic consumption.
After joining the World Trade Organization (WTO) in 2001, China’s foreign trade dependency rate fell to 31.5% in 2020, from 64% in 2006, he said.
Huang also noted that, by 2035, China’s current population of 400 million middle-income people will have doubled to 800 million, and 6 million low-income people will be halved. “With this increase in the middle-income population, China’s foreign trade dependency ratio is expected to drop to 25 percent,” Huang said.
In addition, some existing problems in the Chinese electronic economy which cause “bottlenecks” in manufacturing practices, low degree of market segment and high dependence on imported energy sources will be solved by the development of “internal circulation,” Huang said.
Regarding “external circulation,” China will focus both on attracting foreign investment to China and increasing investment to foreign countries and regions, Huang said.
He pointed out that China has overtaken the United States and has become the largest market for foreign investment. China’s overseas investment grew rapidly to reach $ 1 trillion between 1980 and 2021.
Huang predicted that China’s GDP will exceed 160 trillion yuan ($ 09 trillion) over the next 10 years and that the country still has enormous development potential.